Tag Archives: co-creation

Co-creation through Onderling

March 11, 2019 413540ewstudenteurnl Leave a comment

Your winter tires get stolen from your garage. That is a bummer! Luckily, you have a household insurance policy. You file a claim at your insurance company but guess what? Your cars belongings are not covered by this insurance (Gaastra and Lasthuizen 2013). That does not sound very logical right? Well that is what the majority of the people on Onderling, an initiative of Dutch insurance company FBTO, also agreed upon. And that is why FBTO ended up paying out the money still (Emerce 2016).

In order to innovate successfully, companies are increasingly seeking for new product or service ideas outside their boundaries (Nishikawa, Schreier, Fuchs, Ogawa 2017). Online communities are of increasing importance to businesses as they give companies new ways to interact with their consumers and can be used as input to innovate the offerings of a company (Ren et al. 2012).With the establishment of Onderling, FBTO tries to innovate beyond the existing way of doing business, making an attempt to address the problem arising between consumers and their insurance company. Jeppesen Lakhani (2010) argue problem-solving effectiveness is vital to superior organizational performance. The goal of FBTO is to bring consumers and the company closer together. On the online platform everyone can join in the conversation and vote for real, actual claims and statements about insurances (Emerce 2016).

This is how it works: you report a loss. When this loss is not insured according to the conditions, people insured at the company and employees of the firm have the opportunity to present their claim to the community on onderling.nl– experts already made the decision at this point. The community has the option to vote whether a claim should be paid and add their reasoning. For instance, someone could say the conditions do not classify this case clearly or it should be an exception to the rule. If 60% of the community decides the claim should get paid out, that is what will happen. Additionally, FBTO reassesses if the conditions as they designed it should be adjusted. This way, people help FBTO improve their products, communication and services (Emerce 2016; Gaastra and Lasthuizen 2013; Kruiper 2013) In summary, following the value co-creation framework of Saarjärvi, Kannan and Kuusela (2013), value is created by reassessing rejected claims and improving offerings from the gained insight provided by consumers. This value is created through B2C, in the form of re-evaluation and through C2B in the form of opinions and ideas. The mechanism used for co-creation is co-development, where FBTO can improves its offerings and gets to know what is important to their customers (Saarjärvi, Kannan and Kuusela 2013).Essentially, by providing feedback to improve offerings, they become part of the production process (Tsekouras 2019).

The platform created by FBTO can be seen as a form of social computing, which is concerned with the intersection of social behavior and computational systems. The platform is a modern example of a technology giving rise to new ways of co-creation and interaction between companies and consumers (Oestreicher-Singer and Zalmanson 2013). FBTO created the platform to regain the trust of consumers and enhance transparency in the insurance industry, shifting from a service centric business to a customer centric business (Tsekouras 2019).The online community can provide users with useful informationm, support or it can be a venue for discussion (Ren et al. 2014).The latter is the main strength of the website. The more people give their opinion, the more it becomes visible what people find important when it comes to insurance. With these insights FBTO can adjust their offerings to the needs of the customer. Even though the concept sounded promising, in the beginning the question was whether the concept would be successful. Would the insured be people loyal to each other and vote to pay out the money for every case? The opposite was true. Customers appeared to be critical and often agree with the choices of FBTO (Kruiper 2013).

According to Dellaert (2017), FBTO’s system design could be efficient since it attempts to maximize joint payoffs for both the company as well as the customers. So, do customers see the added value of the new concept? Research shows they do. As you can see in the graph alongside, every aspect is assessed more positively after the implementation of Onderling (Gaastra and Lasthuizen 2013). Furthermore, the last few years FBTO has been declared most customer-friendly insurance company of the year multiple times. Overall, it seems customers see the added value of the concept. However, as with any business idea, FBTO experiences some challenges. The analysis also pointed out respondents were not very familiar with the platform. Only 23% of the people insured at FBTO ever visited the website of which 16% felt like voicing their opinion (Gaastra and Lasthuizen 2013). Furthermore, the biggest challenge is to involve the customers.Community engagement plays a primary part in creating sustainable competitive advantage,yielding higher profits and gaining loyalty from consumers (King, Racherla and Bush 2014).It is important to find users that have an high attachment to the community (Ren et al. 2014) Ren et al. 2014 highlight that a key downfall for companies is to attract the critical mass and engage them. This is no different for Onderling. When you want to let customer think along and incorporate their ideas, this demands organizational commitment. It is one thing to les customers think along, but the feedback from the community has to be processed and something has to be done with it. This means customers have to be top priority (Ren et al. 2014). On the one hand, the objectives of the organization have to be met, on the other hand it is extremely important task to represent the interests of the community members (King, Racherla and Bush 2014). Although it is proven that customer input did actually contribute to the improvement for products and services, it is not always easy to show employees of the firm the added value of customer interaction and to motivate them to actively support the community(Gaastraand Lasthuizen 2013).

So, what is next? To stay relevant, FBTO keeps experimenting with new ways of doing business that go beyond their existing boundaries. In 2016, FBTO started a trial where customers could decide for themselves what they wanted to insure, without policy conditions (Emerce 2016). In case of damage, the crowd would decide if you get your money or not, in a similar way as Onderling. The first trial did not gave the desired results but FBTO will try to keep innovating and serve their customers in the best way possible. Just like Henry Ford, the founder of the Ford Motor Company, once said about co-creation “Coming together is a beginning, staying together is progress, and working together is success” (Sanders and Stappers 2016).

Sources

Dellaert, B. G. (2017). The consumer production journey: marketing to consumers as co-producers in the sharing economy. Journal of the Academy of Marketing Science, 1-17.

Emerce. (2016) FBTO start crowdverzekeren. Retrieved from https://www.emerce.nl/nieuws/fbto-start-crowdverzekeren[03-03-2019].

FBTO. (n.d.) Nieuws en blogs. Retrieved from https://www.fbto.nl/nieuws-en-blog/paginas/consument-beslist-op-onderling-nl.aspx[07-03-2019].

Gaastra, S., & Lasthuizen, M. (2013) De kracht van onderling.nl. Retrieved from https://tudl3047.home.xs4all.nl/Synthese/wp-content/uploads/2015/08/Studie-3-Kracht-van-Onderling-FBTO.pdf[10-03-2019].

King, R. A., Racherla, P., & Bush, V. D. (2014). What we know and don’t know about online word-of-mouth: A review and synthesis of the literature. Journal of interactive marketing, 28(3), 167-183.

Jeppesen, L. B., & Lakhani, K. R. (2010). Marginality and problem-solving effectiveness in broadcast search. Organization science, 21(5), 1016-1033.

Kruiper, R. (2013) Crowdsourcing en co-creatie met FBTO. Retrieved from https://www.emerce.nl/best-practice/crowdsourcing-cocreatie-fbto[05-03-2019].

Nishikawa, H., Schreier, M., Fuchs, C., & Ogawa, S. (2017). The value of marketing crowdsourced new products as such: Evidence from two randomized field experiments. Journal of Marketing Research, 54(4), 525-539.

Oestreicher-Singer, G., & Zalmanson, L. (2013). Content or community? A digital business strategy for content providers in the social age. MIS quarterly, 591-616.

Ren, Y., Harper, F. M., Drenner, S., Terveen, L., Kiesler, S., Riedl, J., & Kraut, R. E. (2012). Building member attachment in online communities: Applying theories of group identity and interpersonal bonds. Mis Quarterly, 841-864.

Saarijärvi, H., Kannan, P. K., & Kuusela, H. (2013). Value co-creation: theoretical approaches and practical implications. European Business Review, 25(1), 6-19.

Sanders, E. B. N., & Stappers, P. J. (2008). Co-creation and the new landscapes of design. Co-design, 4(1), 5-18.

Tsekouras, D. (2019) Lecture 1: value co-creation.

Articles, Business Case

Engaging Generation Y to Co-Create through Mobile Technology

March 2, 2019 rasmusramm Leave a comment

In an increasingly more competitive product and service environment, the need to have an ongoing service innovation for companies in order to successfully compete in the market has never been bigger (Bugshan, 2014). A McKinsey report identifies several things to be the cause of this increasing pressure to innovate on service companies, such as big data and advanced analytics, the Internet of Things and the rise of the mobile internet with a skyrocketing offering for mobile self-service apps (Duncan, 2015). The last aspect might not simply be a cause for this effect, but it might also serve as a powerful tool that companies can utilize in their quest to increase co-innovation and value co-creation, especially when looking at the tech savvy Generation Y (born between 1980 and 1994). The work of Zhang, Lu and Kizilag (2017) is examining the motivations of this generation to increase their participation in value co-creation to make better products and services and for companies to remain competitive. Engaging this generation is very importance due to them being close to digital natives and representing a very sizable part of the overall population (22% in the US) (Schroeder, 2018). Even though the next Generation Z (1994 – today) is even more tech savvy, the are often not of age and are hence often not the customers of many products due to their young age.

Why Y?

Why should companies focus on engaging Generation Y in value co-creation activities?

Generation Y is/has:

General facts given by Zhang et al (2017)

Tech savvy
Stable income
Entrepreneurial spirit
High degree of social interaction and belonging

Additional facts from a background paper by Halliday & Astafyeva (2014)

Drive for entertainment and experience (satisfied by chance to have an impact on a company’s value offering)
High need for self-actualization (fulfilled by creating their own version of a company’s product)
Prestige (gained due to positive exposure their idea gets if used by company)

The research explores how members of Generation Y can be engaged for co-creation through mobile technologies and what the antecedents of the adoption of mobile technology for co-creation are from innovation theory. Utilizing this can become a primary source of competitive advantage, such as in the case of Made.com an e-retail company that puts the decision of what goes from the drawing board into production in the customers hands and was able to grow by 37% in 2018 due to this co-creation strategy (Neerman, 2019).

To establish what influences the co-creation activities of Generation Y the authors use a diffusion of innovation (DOI) framework and analyze the influence of the technical, social and individual dimension on co-creation activities via mobile technology. The analysis of the responses of 689 Generation Y co-creators via mobile technologies revealed that the most important dimension for them is a social community where they are relying on an interpersonal and peer network and on informal communication with the company and other co-creators. The factors that were found to have a significant positive influence on mobile co-creation activities are visualized in Figure 1.

So what motivates Generation Y customers to engage in value co-creation via mobile apps?

Figure 1: Dimensions and factors having a positive impact on value co-creation by Generation Y, based on research of Zhang et. al. (2017)

Interpersonal networks are consisting of the social environment of a person and the findings suggest that the degree to which this network is present in a co-creation context increases the co-value creating activities due to the social response that the people get.

Peer networks within the DOI framework are examining the closeness of the relationships among co-creators and are contributing to co-creation. The better the relationship, the higher the likelihood to share information, increase interaction to co-create with others due to increased trust and willingness to accept other’s recommendations.

While peer networks create a closeness between different co-creators to share ideas, the research finds out that it is equally important to have a frequent and informal exchange of ideas between the potential co-creators and the company with whom they are engaging. Examples of such an informal communication existed at Lego, where customers were given the ability to interact with each other and Lego through the My Lego Network until 2015 (Fandom, 2019).

The individual dimension, in this study measured by the factor of consumer innovativeness, was found to have a positive impact on the contribution as well, showing that some factors might be beyond the influence of a company, should they try to use this research to build a co-creation strategy.

Interestingly out of the three proposed factors of the dimension of technology, only one (ease of use) was found to be important. Ease of use contributes to the co-creation activities of Generation Y due to its role as a facilitator of the adoption of new technologies, such as the applications that were in scope during this research.

How can companies better engage Generation Y?

To improve the engagement of Generation Y there are several useful findings from this research, that companies can utilize. Entrepreneurial spirit of the targeted customer and ease of use of the applications seem to be important enablers of co-innovation without customer engagement does not work. The real art of value co-creation lies in the building of social communities, were this research has provided very interesting further refinements along which a company can build the social environment to ensure a high degree of customer co-creation. To visualize the varying degree of how appealing online offerings are to generate value co-creation and how they can be improved based on this research, two companies LEGO and P&G will be examined.

P&G the Laggard (per Zhang et al):

Has an online offering for value co-creation called P&G Development & Connect
Gives the customer access to predefined areas where the company would like the customers to submit their ideas
Only one-way communication from the company to customer
No informal way of communication
No community building with regards to interpersonal networks or peer networks

Improve Generation Y-Activity by:

Allow customers to chat with the company in (interpersonal communication)
Build a community, where equal minded individuals can share and review ideas (peer and interpersonal network building)

LEGO (text book example (per Zhang et al)):

Has 6 different communities each serving a different segment (e.g. LEGO Mindstorms for older customers with tech affinity, LEGO Movie Maker for customers interested in directing and editing film, etc.)
These communities are separated to allow the peer groups to be even similar and foster social interaction, trust and collaboration
Customers can interact via Twitter and chat to get the thoughts of LEGO employees on their ideas

As can be seen by the two examples LEGO has built a very differentiated strategy for customers to interact with them, satisfying all the dimensions found by the research of Zhang et al (2017). P&G has some areas of improvement and it appears that this lag might be due to a focus on an older generation and hence the negligence of factors that are important for the engagement of Generation Y. Yet, as stated previously, even large and established cooperation can benefit from value co-creation from Generation Y and a first step towards this would be to consider the dimensions found by Zhang et al (2017).

Room for improvement

Even though this research provides a very interesting first starting point for academics and practitioners, it is of exploratory nature and has some weaknesses. The study was only conducted among value co-creators, so there is no distinction possible to non-creators. Further the dimensions are very broad and future research especially on the social dimension would be very interesting to fully understand the phenomenon that are taking place and gain insights that can be utilized by practitioners and academics alike.

References:

Bugshan, H. (2014). Co-innovation: The role of online communities. Journal of Strategic Marketing,23(2), 175-186. doi:10.1080/0965254x.2014.920905

Duncan, E. (2015, February). Service innovation in a digital world. Retrieved February 27, 2019, from https://www.mckinsey.com/business-functions/operations/our-insights/service-innovation-in-a-digital-world

Fandom. (2019). My LEGO Network. Retrieved February 28, 2019, from https://mylegonetwork.fandom.com/wiki/My_LEGO_Network

Halliday, S. V., & Astafyeva, A. (2014). Millennial cultural consumers: Co-creating value through brand communities. Arts Marketing: An International Journal, 4(1/2), 119-135. doi:10.1108/am-01-2014-0003

Neerman, P. (2019, February 08). Made.com grows by 37%: “We can afford to fail”. Retrieved February 27, 2019, from https://www.retaildetail.eu/en/news/furniture/madecom-grows-37-we-can-afford-fail

Schroeder, W. J. (2018). Generations X,Y, Z and the Others. Retrieved February 27, 2019, from http://socialmarketing.org/archives/generations-xy-z-and-the-others/

Zhang, T. C., Lu, C., & Kizildag, M. (2017). Engaging Generation Y to Co-Create Through Mobile Technology. International Journal of Electronic Commerce,21(4), 489-516. doi:10.1080/10864415.2016.1355639

Articles, Opinion

The dark and the bright side of co-creation

March 10, 2018 382727kg Leave a comment

Nowadays, companies are really engaged with consumers as they participate in a company’s development process. Active contribution leads to ideas, solutions and positive word-of-mouth(WOM). Collaborative innovation creates a sense of community among the participants. However, it may not always live up to the expectations of its members or is seen as a success. So, are there only positive sides of co-creation? The goal of this paper was to explore triggers for positive and negative reactions from engagement in online innovation communities (Gebauer et al., 2013).

How did they study it?

A qualitative study was conducted to find triggers in online innovation communities and a quantitative study tested how triggers influence the behavior of members of online innovation communities. Continue reading The dark and the bright side of co-creation →

Articles, Business Case, Opinion

GE crowdsourcing platform – Let’s set the collective brain on fire!

February 8, 2018 Tran Truong An Nguyen Leave a comment

We live in a fast-paced digital world and it can be challenging for companies to keep up with the speed of today’s ever changing digital era. However, new information technologies have also empowered more technologically savvy businesses by giving them new means to operate, promote their products and services, and engage with customers. One company that is constantly taking advantage of these new tools is General Electric (GE), an enterprise who has succeeded in part because of its willingness to take risks and embrace innovative technologies. The most recent example of this mindset is Fuse, their new open innovation platform that launched in late 2016. It is basically an open crowdsourcing platform, which allows users from all around the world to collaborate with each other and work with GE engineers to solve meaningful technical challenges.

How does Fuse work?

The first step is for the Fuse team to translate GE customers’ needs and “pain points” into projects on the Fuse platform. Whereas most projects are straightforward and thus directly released in the form of challenges, some appear to be less clear and hence are uploaded on the “Brainstorming Section” of the Fuse platform as “potential challenges”. These potential challenges include a (rather extensive) description of the problem to be tackled as well as precise requirements for the solution, and contributors are asked (1) whether they would be interested in such a challenge, and (2) what additional questions the Fuse team should answer before launching the challenge. Based on the feedback received, the Fuse team might decide on further actions. When released, each individual challenge comes with a description of the problem, clear requirements for solution submissions, judging criteria, a timeline, a description of the prizes for the winners, and the official rules of the competition (including property right issues).

Example of a Fuse challenge

In a second step, contributors from all around the world are invited to submit innovative contributions. Note that even though anyone can sign up and take part in challenges, the very technical nature of the challenges serves as a skills-based filtering mechanism as only people with a certain degree of knowledge in engineering would be able to understand the challenges. Once on the Fuse platform, anyone can have access to all the relevant information related to the challenges, however only registered users are allowed to submit entries. During the whole duration of the challenge, contributors can use the discussion board to brainstorm together or ask the competition holders questions. Not only does the Fuse team rapidly answer these questions and provide regular feedback/input, but they also organize “live Q&A sessions”, during which the participants can submit questions that are answered live in a video feed.

The final step is for the Fuse team to evaluate the submissions, select the winners (generally the three best entries) and allocate the money prizes. The interesting entries are also forwarded to GE’s technical team, where they are further developed into implementable solutions.

Efficiency Criteria

In less than two years, GE succeeded in creating an innovative community and successful products from their contributions (Picklett, 2017). This was made possible for the following reasons: combination of extrinsic and intrinsic incentives, good management, and well-structured governance including the mechanisms recommended by Blohm et al. (2018).

From a contributor’s perspective, the Fuse platform and its challenges are interesting not only because of the cash prizes, but also because it is designed towards building long-term relationships with its contributors. For instance, competition winners actually have an opportunity to further work with GE engineers on implementing their designs (Kloberdanz, 2017). In addition, there is also an attractive physical part to Fuse projects, which consists in a micro-factory in Chicago designed for rapid prototyping, small-batch manufacturing, and modular experimentation (Davis, 2017). This faculty will be open to contributors and can constitute an incentive for them to become part of the Fuse community as it is a good opportunity to bring their ideas to life, work with GE professionals, and meet like-minded innovators. Finally, the Fuse challenges are also a good opportunity for contributors to collaborate with other brilliant mind, expand their business network, build their professional reputation, and gain recognition from their peers.

From GE’s perspective, the Fuse platform is a new source of innovative and ideas, which can speed up content creation, cut R&D costs for the company, and provide GE with an opportunity to spot talents who might be valuable additions to their team. But how is GE able to overcome the challenges inherent to crowdsourcing (e.g. huge quantity, low quality, free-riding behaviour, risks of sharing information)? First, due to the technical nature of the Fuse challenges, the clearly defined guidelines provided to the participants, and the rapid feedback/additional inputs provided during the competition, GE ensures that only a manageable number entries of a certain quality are submitted, thus facilitating the evaluation process. The platform is also clear about the transfer of PI rights, which avoids troubles along the way. Second, for most challenges, challenge, entries are private and only viewable by the creator, admins, and judging panel. As a result, GE is able to avoid free-riding behaviours. However, contributors are still able to communicate with (and help) each-other via the discussion board, and the Fuse team makes sure to encourage the discussion with feedback and additional information, hence allowing contributors to still learn from each other. Finally, even though opening up GE’s internal workings/information of some products in order to run these challenges can be risky, the company acknowledges that “there are certain risks you just have to roll with if you want to make progress and that willingness to take those risks is what makes this exciting.” (Davis, 2017). This quotes shows that GE understands the need to willingly take risks in order to continuously transform the company and, so far, Fuse seems to be worth it as GE reunited more than 8000 contributor successfully implemented several ideas generated by the platform in less than a year (Davis, 2017).

In summary, the joint profitability criterion is met as the Fuse platform creates value for both GE and its contributors. Furthermore, the costs linked to this innovative business model are relatively low as the Fuse team only consists of 4 employees based in Chicago (Pickett, 2017). However, as the platform matures, hosts more challenges, and attracts more contributors one can assume that the number of employees will have to increase. Still, the costs-benefits ratio should remain interesting compared to doing everything in-house. Finally, the legal concerns are taken care of thanks to inclusion of PI agreements in the official rules of the Fuse challenges, and the social norm dimension is met as GE is a well-known, reputable brand, hence building trust with contributors.

References

Blohm, I., Zogaj, S., Bretschneider, U., & Leimeister, J. M. (2018). How to Manage Crowdsourcing Platforms Effectively?. California Management Review, 60(2), 122-149.

Davis, B. (2017). How GE is using co-creation as part of its digital transformation. Retrieved from https://econsultancy.com/blog/68902-how-ge-is-using-co-creation-as-part-of-its-digital-transformation

Fuse. (2018). Fuse Platform. Retrieved from https://www.fuse.ge.com

Kloberdanz, K. (2017). Working The Crowd: This Fuse Will Set The Collective Brain On Fire. Retrieved from: https://www.ge.com/reports/working-crowd-fuse-will-set-collective-brain-fire/

Pickett, L. (2017). GE Fuse’s open innovation platform invites NDT professionals to co-create solutions. Retrieved from https://www.qualitymag.com/articles/94304-ge-fuses-open-innovation-platform-invites-ndt-professionals-to-co-create-solutions

Business Case

Introducing the future of fashion with Coded Couture

March 9, 2017 459622sk Leave a comment

“We’re about to change the fashion industry by bringing the customer’s personality into the design process through data technology”. – Aleksander Subosic, co-founder of Ivyrevel.

Finding unique clothing can be difficult; custom-made clothing is usually not affordable and designing your own piece requires design experience, which most people lack. Ivyrevel, part of the H&M Group and the world’s first digital fashion house, partnered up with Google to solve this issue by combining couture with data technology. Together, they created the Data Dress: “A personalized dress designed entirely based on a user’s context signals” (Brook, 2017).

How does it work?

First, install the app and select an occasion e.g. party, gala or business, and a style for the dress. Then, simply carry your phone wherever you go (which you probably already do) and the app will use Snapshot API to learn from your daily activities, with your permission. During seven days, the app will capture context signals and ask you to confirm certain the data to ensure that it corresponds with your lifestyle. By doing all of the aforementioned, you become part of the value creation process. Finally, the data is passed through an algorithm that creates a virtual custom-made dress, ready for you to purchase.

Will customers buy the Data Dress?

According to a survey by Bain & Company, +/-30% of shoppers were interested in designing their own clothing. Furthermore, they found that unique products lead to lower return rates and create a deeper connection between shoppers and retailers (Wiggers, 2017). Thus, there is a potential market for the data dress.

Efficiency criterion

This video, shows that Kenza lives in Stockholm where it is -2°C and that she visited a fancy restaurant. Therefore, the app made her a black velvet dress with crystal details, reflecting her lifestyle. This shows that consumers will get a truly unique, on-trend, and custom-made dress. Additionally, consumers become part of revolutionizing the way we look at fashion. For fashionistas interested in technology this is the ideal combination, and it allows them to be early adopters within their community.
Ivyrevel aims to ‘merge fashion creativity with technological innovation.’ (Ivyrevel.com). Thus, by introducing the data dress, Ivyrevel will achieve this goal. Regarding costs, Ivyrevel is not dependent on designers and won’t need to invest much in production, since it already has a clothing line and production facilities. According to Adformatie.nl, the dress will cost €93.
I expect that Google will receive financial resources by allowing Ivyrevel to use its API technology. Additionally, Google enhances its positive reputation regarding technological innovation and receives positive WOM.

Feasibility of Required Reallocations

Currently, the app has launched in closed alpha stage and is being tested by selected global fashion influencers (Brook, 2016). Since not much information is available regarding the specific institutional arrangements and –environment, I will propose a few.

Ivyrevel must consider:

The protection of consumers’ privacy. Consumers are responsible for granting tracking permission and Ivyrevel will not share their information with other parties.
Safe payments within the app.
Production processes that are carried out under ethic conditions.

It is important that Ivyrevel makes clear arrangements for these kinds of issues to prevent problems from arising.

References

http://www.ivyrevel.com/se/codedcouture/codedCouture.html

Google blog: https://android-developers.googleblog.com/2017/02/fashion-gets-digital-upgrade-with.html

Brook, J. (2017, February 06). Fashion gets a digital upgrade with the Google Awareness API. Retrieved March 6ƒ, 2017, from https://android-developers.googleblog.com/2017/02/fashion-gets-digital-upgrade-with.html

Business Insider: Wiggers, K. (2017, February 07). Google partnered with H&M-backed fashion startup Ivyrevel to build customised ‘data dresses’ Retrieved March 6, 2017, from http://www.businessinsider.com/google-partners-with-hm-ivyrevel-for-coded-couture-project-2017-2?international=true&r=US&IR=T

Adformatie: H&M, Google en MediaMonks personaliseren jouw kleding. (2017, February 9). Retrieved March 6, 2017, from http://www.adformatie.nl/nieuws/hm-google-en-mediamonks-personaliseren-jouw-kleding

Articles

Do me a Flavor

March 4, 2017 lucnooren93 Leave a comment

Companies will need to interact with their customers so closely that they actually “co-create” value with them on an individual basis (Prahalad, C; ‘’The New Age’’, 2008). Frito-Lay, the foods division of PepsiCo, is taking the management guru’s advice quite seriously and used a Facebook contest (Do us a Flavor) where participants created their own flavor of potato chips with a chance to win $1,000,000 and have their flavor become reality. After participants submit a flavor idea, it is instantly applied to a Lay’s package with an appropriate image. They have also launched a similar campaign last year which asked consumers to vote for the flavour of their choice between the new launches. When talking about the efficiency criteria you must say that these social programs can be a valuable way to both gather insights from your customers and to market the brand in a playful way. As Frito-Lays showed these programs provided an abundance of new ideas that can lead to more insights in to their customer preferences.

I think Frito-Lay has executed this program well and other companies should pay attention when developing their own initiatives. Next to that, they provided instant feedback social sharing which results in people using the platform even more because people like collecting likes. In Do us a Flavor, participants can find out how many people like their flavor and from where in the country interest is coming. They can also share their flavor ideas with their Facebook friends to increase their “likes.” Which gives the customers even a bigger encouragement to use the platform and create more ideas. A big win-win created by Frito-Lay.

An increasing number of companies are doing precisely that to drive up engagement levels and interactivity with consumers to create a customer co-creation. Talking about consumer value creation Frito-Lay has done a great job. When looking at the joint-profitability criteria (CDCC, 2017) they used their consumers to create their own products. Lays profits by producing new type of chips that you know for sure your customers like and on the other hand the consumers benefit by have chips with their own flavor and participate in a social platform with the possibility to receive a large amount of money.

Articles, Business Case

DHL: Reinventing the role of the customer

March 3, 2017 babettep Leave a comment

Don’t limit co-creation to just problem solving or new product definition; use it to define new markets to grow into- Tony Atti

DHL, the global market leader in logistics, is part of the world’s biggest mail and logistics services company Deutsche Post. DHL provide an excellent example of a company which are using co-creation (where the company and customers collaborate) to generate new business ideas. This is particularly evident in their recent Parcelcopter project. This short video shows the essence of the Parcelcopter project. (DHL, 2017)

Customer Co-Creation: what is it?

The term co-creation was coined by Prahalad and Ramaswamy (2004) as ‘the joint creation of value by the company and the customer; allowing the customer to co-construct the service experience to suit their context’. Basically, co-creation means the company and customer work together to, in this case, produce new ideas. This can have a number of benefits for a company, offering a new way to innovate and also boosting customer satisfaction. The more the customer feels that the company is listening to them, embracing and delivering their specific needs, the more the customer wants to be associated/engaged with this particular company.

How does DHL apply Customer Co-Creation?

DHL has used co-creation to improve supply chain logistics with its Parcelcopter project. DHL noticed that their customers wanted to help in rethinking about how to improve their supply chains and thus improve their business performance (customer value proposition). DHL set up some innovation centres and invited their customers to come and interact with DHL employees to share ideas with each other (key resource and process). From this collaboration, a number of new ideas have emerged, including the Parcelcopter. The Parcelcopter (see video for further explanation) is an idea to use drones for delivery, which could improve DHL services. (DHL, 2017)

How well has Customer Co-Creation worked for DHL?

In the beginning, the co-creation concept was received with skepticism, both internally and externally. Customers thought it was a clever marketing/sales technique. The company was forced to take a strong look at its own structure and processes. However, the result has been well worth it. With this structure, customers as well as DHL benefit from the co-creation in distinctive ways. Co-creation aims to improve customer satisfaction/engagement. The customer is better served in this structure. It also aims to produce new ideas whilst lowering research and development costs for the company. There is some evidence suggesting that customer satisfaction improved after they begun using co-creation. According to Forbes, DHL’s co-creation efforts resulted in customer satisfaction scores rising to over 80 percent and a higher level of customer retention (joint profitability). DHL’s co-creation scheme has also helped them to produce a lot of other new ideas beside the Parcelcopter. It is unclear whether it has also allowed them to reduce research and development costs. The institutional environment, in this case, is less relevant because of the used co-creation platform (customers only interact with DHL employees to share ideas). The feasibility requirement is met, the co-creation concept is implemented and proved to be successful.

Implementing a customer co-creation practice as part of their broader innovation research work is shown as a successful idea. It could also be a useful consideration for other companies to follow the path of DHL.

Sources

Prahalad, C. K., & Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of interactive marketing, 18(3), 5-14.

DHL.com (2017). Available at: http://www.dhl.com/en/press/releases/releases_2015/group/dpdhl_group_to_foster_global_growth_through_pioneering_innovation_approach.html. Accessed on 02/03/2017

Business Case

Sounds Like Music To My Ears

February 17, 2017 mvanspaendonck Leave a comment

By: Madeleine van Spaendonck (365543ms)

The Problem Situation

Do you ever pay attention to the music you hear in your favorite store? Many shops and hospitality businesses in the Netherlands still make use of outdated mix-CDs and standard playlists. Considering it has become increasingly important for retail businesses to provide a dynamic brand experience, how can background music be used to optimize the customer journey?

Atmosphere and its business model

Amsterdam-based Rockstart-startup ‘kollekt.fm’ addresses this situation with its new B2B music service, ‘Atmosphere’. Its key resource is its pool of musicians, DJs and producers, called ‘curators’. New clients undergo an extensive intake-procedure that allows Atmosphere to create a ‘music identity’ that reflects the company’s brand identity, target audience and desired customer experience. Consisting of a collection of moods, sounds and emotions, this allows the platform to match brands with the most suitable curators for them. Atmosphere allows curators to use the music on its platform to continuously assemble new playlists on a monthly basis. A streaming app is then used to play the music on-location. (Atmosphere, 2017)

Atmosphere’s value proposition is a better customer experience for brands and a new earning model for artists and music experts. It also incorporates feedback to create better playlists every month and learn from each brand profile to improve its services. Businesses pay Atmosphere on a monthly basis for using the platform, and the curators on the platform decide the price of their service.

Co-Creation Efficiency Criteria (Carson et al., 1999)

Atmosphere is a two-sided platform that connects retail/hospitality businesses with ‘curators’. The business model allows for joint profitability, as it enables businesses and curators to interact to create value together and maximize their payoffs. A study conducted by the Stockholm School of Economics found that background music that matches brand identity can increase store sales by at least 30% (Johansson & Moradi, 2015), which presents a measurable potential financial output for businesses. The curators suggested by the platform are picked by a particular company on the basis of the quality of their playlists and close fit with the brand, which incentivizes them in terms of effort to deliver the most suitable music sets and thus get rewarded in return. To facilitate this, Atmosphere invests in algorithms and models to create accurate brand profiles.

Furthermore, internal institutional arrangements are present in the form of ‘rules of the game’. Multiple curators are suggested to the client, who can make the final choice based on music samples. To stay ‘matched’ with a company, the chosen curator must continuously produce high quality work; otherwise, the company will switch to another curator. In terms of institutional environment factors, the legal environment of the business model poses the most significant threat, as songs are often copyrighted. Atmosphere has addressed this issue by acquiring the license rights for all the music that is available on its platform. This allows it to be used for commercial purposes. However, this is a continuous process; if Atmosphere wishes to attract and keep customers on its platform, it needs to constantly update its music offering.

Sources

Atmosphere. 2017. How We Work. [ONLINE] Available at: https://getatmosphere.com/how-we-work/. [Accessed 14 February 2017].

Carson, S. J., Devinney, T. M., Dowling, G. R., & John, G. (1999). Understanding institutional designs within marketing value systems. Journal of Marketing, 115-130.

Johansson, G., & Moradi, J. (2015). What Does Your Brand Sound Like?. [ONLINE] Available at: https://www.soundtrackyourbrand.com/static/content/press/what-does-your-brand-sound-like_pdf_eng.pdf. [Accessed 13 February 2017].

Kollekt.fm. 2017. Company Web Page. [ONLINE] Available at: http://kollekt.fm/. [Accessed 14 February 2017].

RetailTech. 2017. Artists Select Music For Retailers . [ONLINE] Available at: http://www.retailnews.nl/tech/8TtNf0gzR2OQ2jAgzIUdOQ-28/artiesten-selecteren-muziek-voor-retailers.html. [Accessed 14 February 2017].

Silicon Canals. 2017. Kollekt.fm’s Atmosphere will find the right tunes for every company. [ONLINE] Available at: http://siliconcanals.nl/news/startups/kollekt-fm-atmosphere-finds-the-right-tunes/. [Accessed 13 February 2017].

Articles

Open supplier innovation?

February 17, 2017 bernicehiltrop Leave a comment

In class, it was stated that the best ideas in crowdsourcing come from people outside the topic or differently stated, without much knowledge on the good or service. In this post, I would like to take the opportunity to stress the influence of supplier involvement when discussing open innovation to generate ideas. Thus, using a different perspective, more B2B and upstream focused. Would it be helpful in idea generation to include knowledgeable suppliers?

In the article by Alexy et al. (2011), it was noticed that input delivered by suppliers was interesting as specific technical needs are known, resulting in higher quality ideas submitted. Therefore, concluding that signaling more requirements or restrictions to consumers could increase the number of valuable submissions. This could address an aspect also mentioned during the class, where companies (e.g., Philips and Dell) face issues with the quality delivered by submissions of the crowd.

First, supplier involvement can be considered as “the integration of the capabilities that suppliers can contribute to NPD projects” (Johnsen, 2009, p. 187). A literature review by Johnsen (2009) states factors that successfully affect supplier involvement. The successful factors studied are supplier selection, supplier relationship development & adaption, and internal customer capabilities. These factors facilitate a shorter time for the product to enter the market as well as improve the product quality, and reduce development and product costs. More importantly, the review indicates that supplier involvement should be further studied in-depth as different thoughts on innovation related to the involvement of suppliers exist. Namely, the article states that existing suppliers could be too familiar with the product leading to limited innovation. Thus, in line with earlier mentioned, a ‘crowd’ without prior knowledge provides better solutions.

Later, a North American longitudinal study by Yeniyurt et al. (2014), specifically on supplier involvement in buyer’s NPD, indicates that among various aspects, buyer-supplier communication and suppliers’ trust of a buyer significantly influences the participation of a supplier towards co-innovation and supplier involvement in a buyer’s NPD. Furthermore, the study found that co-innovation as well as financial performance of both the supplier and buyer increases when suppliers are actively involved in the buyers NPD. Hence, more reasons supporting the involvement of suppliers when aiming to generate ideas.

A related business an example can be taken from the Unilever. In 2012, Unilever launched an ‘Open Innovation Submission Portal’ to collaborate with its suppliers. Currently, the platform is still perceived as successful and therefore, still operating and evolving (Procurementleaders, 2012; Unilever, 2017). The portal provides experts of certain processes to share and optimize products from their specialist or technical view.

All in all, I do believe that it is valuable for companies, aiming to be innovative, to include suppliers in generating ideas on product development. Not only to create submissions of higher quality, and a trustful relationship. Moreover, a broad and diverse crowd consisting of both consumers and suppliers might be optimal in order to include all viewpoints to generate the best value for the customer.

References

Alexy, O., Criscuolo, P., & Salter, A. (2011). No soliciting: strategies for managing unsolicited innovative ideas. California Management Review, 54(3), 116-139.

Johnsen, T., E., (2009). Supplier involvement in new product development and innovation: Taking stock and looking to the future. Journal of Purchasing and Supply Management, 15 (3), 187-197.

Yeniyurt, S., Henke, J.W., & Yalcinkaya, G. (2014) A longitudinal analysis of supplier involvement in buyers’ new product development: working relations, inter-dependence, co-innovation, and performance outcomes. Journal of Academey of Marketing Science, 42, 291-308.

http://www.procurementleaders.com/news-archive/news-archive/unilever-expands-supplier-innovation-project

https://www.unilever.com/about/innovation/open-innovation/

Business Case

MADE.com; shifting the power of creativity to consumers

February 15, 2017 lottevuden Leave a comment

“The 3 Cs of modern creativity are Community, Crowdsourcing and Co-creation”- Jon Wilkins

MADE.com , what is it?
MADE.com, located in London and launched in 2010, is a brand that designs and retails furniture online and via several showrooms across Europe. MADE.com is known by its high frequency of two releases of new collections per week and not owing their own factories. Instead, they give factories instructed to meet orders. More importantly, the most fascinating thing about MADE.com is the way they actively involve customers. (MADE.com, 2017)

Business model – How it works
MADE.com shifts the power of creative innovation to stakeholders in two remarkable ways, so customers and designers create most of the value. First, customers decide which designs go into production by voting on them (key resource and process). The most popular designs make it to the production facility. By using crowdsourcing for physical design purposes, MADE.com applies a co-creator model (Chui et al., 2016). Second, MADE.com created a service called “Made Unboxed”. The idea behind MADE Unboxed is that customers upload photos of their interior designed by MADE.com, with the purpose to inspire other customers (key resource and process). Consumers can now look at items in a real environment, without going to a showroom. Moreover, the online community nominates some home designs to serve as a showroom. Everyone who is interested can visit designs at the “interior designers” homes. This adds the extra service of touching and feeling the items, instead of only viewing the items (Customer Value Proposition). This short video, which serves as an overview of the services offered by MADE Unboxed, shows that cities are covered with multiple mini MADE.com showrooms. (MADE.com, 2017; Myndset, 2015; Johnson et al.,2008)

Moreover, their crowdsource initiatives go even further. MADE.com also organizes an annual online contest that is similar to LEGO ideas (Mladenow et al., 2015). The Made Emerging Talent Award is a contest in which promising upcoming designers are able to submit their ideas (Customer Value Proposition). The ideas will be judged based on the number of votes given by other designers and customers. Obviously, the designs with the most votes wins the contest. After the contest, MADE.com takes the winning design ideas into production and adds them to their product line for the next 12 months (Profit formula).

Efficiency criteria; Win-win-win situation
With the current structure of the contest and MADE Unboxed, designers, customers as well as Made.com benefit from it in distinctive ways. The designers get exposure and maybe even a career boost if they win (see video for further explanation). Customers vote and can thereby give direction to which designs they would like to see for sale (i.e. efficiency benefit). Finally yet importantly, Made.com benefits from all the votes and uploaded ideas because it gives them certainty that they produce the most desired furniture. In addition, because of all the mini showrooms, MADE.com does not need to have many showrooms themselves, resulting in lower asset costs. It clear that this business model results in joint profitability for all parties.

MADE.com also satisfies the feasibility of required reallocations criteria. Het polity is not invloved and terms regarding what is allows and what not need to be accepted by stakeholders.

Sources:

Chui, C., Liang, T. & Turban, E. (2016) What can crowsourcing do for decision support?. Journal of Decision Support Systems, 65: 40-49

Johnson, M.W., Christensen, C.M. & Kagermann, H. (2008). Reinventing your business model. Harvard Business Review, 86(12): 50-59

MADE.com (2017) MADE.com. Available at: http://www.made.com/about-us. Accessed on 14/02/2017

Mladenow, A., Bauer, C., Straus, C. & Gregus, M. (2015) Collaboration and Loyalty in Crowdsourcing. International Conference on Intelligent Networking and Collaborative Systems.

Myndset (2015) Available at: http://myndset.com/2015/04/digitail-experience-made/. Accessed on 14/02/2017

Articles

Do you like to question everything? Then you’re welcome here

March 7, 2016 apurvsharma88 Leave a comment

In the today’s world of internet people are surrounded by lots of information often leading to an overload of information. It is even more problematic to identify the right information from the wrong or redundant one. This overload of information can often lead to unanswered questions which we may face in our day to day lives. Is organic healthy? Should I eat GMO food? What are gravitational waves? Are vaccines reliable? A simple google search can yield results which offer contrasting arguments and you just do not know what to believe. Introducing the Skeptics Guide to the Universe, http://www.theskepticsguide.org/. An online community of users and experts which tackle these day to day questions and provide answers based on logic, science and analytical reasoning. It is also an award winning science podcast with over 500 episodes.

Continue reading Do you like to question everything? Then you’re welcome here →

Business Case, Videos

Brigade: Redefining Politics, Civic Engagement and Democracy?

February 26, 2016 glenndejong Leave a comment

In today’s democracy, politicians have a tough time reaching millennials. In the same way as religion, Western politics currently faces difficulties to create affiliation with the latest generations. Especially, the themes of politics and voting have lost interest of the younger generations over time:

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Articles, Business Case

Seed & Spark – Crowdfunding for Independent Filmmaker

February 23, 2016 367347hl Leave a comment

Creating and writing up an excellent script is already hard enough, however raising funding to make the screenplay to reality and brining the film to the cinema in front of audience represent another big challenge to the filmmaker. In recent years, heat waves of crowdfunding shed a light on film industry as well. The emergence of film crowdfunding has made some breakthrough in assisting film projects especially for independent filmmakers to raise funding.

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Business Case

“Brilliant creative, from creative people everywhere”

February 23, 2016 370068da Leave a comment

Introduction

The labour market is rapidly changing as it was first known by long term employment and now more and more by ‘contingent’ workers (Eamonn, 2015). Especially contracting talent is done in a more flexible way. Reports even state that by 2020 about 60 million US people will be ‘contingent’ workers (Eamonn, 2015). Crowdsourcing platforms provide the opportunity for brands/companies to manage talent in a flexible way. Tongal is such a crowdsourcing platform, but what does Tongal actually do?

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Administrative, Articles, News

Grandma knows best: Online knowledge contribution

February 23, 2016 floriannegriffioen Leave a comment

Today, one of my group members stained my suede jacket with permanent marker whilst discussing our business idea. After panicking, the first thing I did is type the sentence “how to get ink out of suede” into Google. The pages I end up at are online communities, in which people share their experiences on the same problem and provide me with the knowledge I need to remove the stain. This example might sound very familiar to you: There are more than 2550 of such communities worldwide! These online knowledge sharing platforms provide a space for social interaction where individuals can obtain knowledge and feedback and exchange opinions on certain topics, such as stain removal.

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Articles

Dell’s IdeaStorm: still co-creation?

February 22, 2016 376833ml Leave a comment

Nowadays, the strategy called co-creation has taken the business world by storm and many firms try to hop on board. Co-creation allows companies and customers to interact with each other by creating a customer experience that is valuable for both parties. On one hand firms get a better grasp of the wants and needs of their customers, while customers on the other hand feel that their ideas are valued and their needs get fulfilled.

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Business Case, News

“We are quite curious, really, to the tune of one million dollars”

February 14, 2016 liselottekeizer Leave a comment

When the number of movies and series on Netflix increased exponentially, the CEO of Netflix, Reed Hastings, realized they needed to improve their recommendation system to retain customers. After Netflix made several unsuccessful attempts to develop a new algorithm to improve their movie predictions accuracy, they decided to start a three–year open contest. When they launched the challenge, they invited their lead users to come up with a better recommendation system than the one Netflix had at that time, named Cinematch. Many mathematicians, statisticians, software engineers and cyber geeks, symmetrically skilled, from all over the world participated. The variety of participants is often beneficial since somebody outside the field of the problem can often come up with a good solution (Harvard Magazine, 2013). To win the contest, the proposed system had to improve recommendation accuracy with at least 10%, compared to Cinematch. The ones who would achieve this goal, received a price of one million dollars.

Continue reading “We are quite curious, really, to the tune of one million dollars” →

Articles

Open for Ideation: Individual-Level Openness & Idea Generation in R&D

February 12, 2016 glenndejong Leave a comment

In today’s business environment, information and innovation are key to success. Companies are constantly trying to improve their offerings and business model by increasing their knowledge about customers, competitors, products, services and new technologies. To achieve this open innovation practises are increasingly used, but a major part of the knowledge in companies is generated by individuals who do research to generate new ideas and capture opportunities. This required know-how can be illustration_1_light-bulb-team-work_1-750x696 sourced from within the company or from external sources. Nowadays, individuals performing R&D functions are encouraged to seek for knowledge outside the boundaries of the firm. This requires more openness to external sources. However, according Salter et al. (2015) an individual’s openness to external sources of knowledge is curvilinear related to the ability of that individual to develop new and useful ideas for the organization (e.g. ideation performance).

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Business Case

E.ON: Home of the Future

February 12, 2016 354240 Leave a comment

Together with co-creation specialist 100% Open, the energy company E.ON has issued a challenge for the best idea to a home energy makeover. Such contests are not new, but the approach they used is very interesting. In 2012, the companies started a crowdsourcing project for a five-part documentary called Home of the Future. In this documentary the Perera family from Sheffield is filmed while experts install new gadgets or other projects to safe energy. The documentary focuses on the need for future energy efficiency, environmental-responsibility and saving time and money. Examples include domestic power stations and waterless washing machines. Next to this, future technologies are assessed in how useful and cost effective they are in a real world situation.